Budget 2025: Federal Job Reductions in Public Service
Ottawa is planning to cut approximately 16,000 federal public service jobs over the next four years as part of the Liberal government’s spending review. To help ease this transition, an early retirement incentive program will be introduced, allowing employees aged 50 or older with over 10 years of service to retire early without penalties.
Government Spending and Savings Targets
The budget released on Tuesday outlines departmental plans to achieve combined annual savings of $13 billion by 2028-29. A key measure includes reducing the federal public service workforce by 40,000 full-time positions during the same period, with nearly half of these cuts driven by internal savings initiatives.
“We are modernizing government operations to deliver better results for Canadians and reduce costs. To meet the moment, we must reinvent government to be fit for the 21st century.”
“This means recalibrating activities and fiscal room towards our core mandates — spending less on the day-to-day running of government.”
Workforce Growth and Cost Projections
Since the Liberals took office in 2015, the federal workforce grew steadily, reaching nearly 369,000 full-time employees in 2023-24 according to the Treasury Board. Without spending cuts, staff costs are projected to increase by $7 billion by 2029-30, as noted by the Parliamentary Budget Officer (PBO).
Key Points:
- 16,000 public service job losses expected over four years
- Early retirement program for employees 50+ with 10+ years of service
- Annual departmental savings target of $13 billion by 2028-29
- Federal workforce reduction totalling 40,000 full-time positions
- Staff costs forecast to rise by $7 billion by 2029-30 without cuts
Author’s summary: The 2025 budget plans significant federal workforce cuts alongside a push to modernize government operations and reduce costs while managing projected staffing expenses.